Bloomberg News

UniCredit Investors Back Share Sale to Raise 7.5 Billion Euros

December 15, 2011

Dec. 15 (Bloomberg) -- UniCredit SpA’s shareholders approved Italy’s biggest bank’s proposal to raise 7.5 billion euros ($9.8 billion) through a share sale.

The rights offer, which is expected to start in January, was approved by 97.9 percent of the investors attending an extraordinary shareholders meeting in Rome, according to Chairman Dieter Rampl. That equates to 33.6 percent of the bank’s ordinary shares. The rights offer “cannot be avoided” as regulators are insisting that “all banks have sufficient liquidity,” Rampl told shareholders.

UniCredit plans to sell shares after the European Banking Authority said last week the lender needed to raise 8 billion euros of additional capital, the second-highest amount among the region’s banks after Banco Santander SA. Chief Executive Officer Federico Ghizzoni is also cutting jobs and costs to strengthen the bank’s finances and improve profitability.

UniCredit rose 2.2 percent to 71.7 cents at 5:09 p.m. in Milan trading, giving the bank a market value of about 13.8 billion euros. Unicredit has slumped 54 percent this year, compared with a 35 percent decline in the 46-company Bloomberg Europe Banks and Financial Services Index.

A representative of Fondazione Cariverona, which owns 4.2 percent of UniCredit, called for “serious analysis” of why the bank was forced to raise capital. He didn’t give his name. Cariverona will vote in favor of the bank’s planned stock sale, the representative said.

Libyan Stake

The Italian government will release about 375 million euros of frozen assets owned by Libya’s central bank to allow the institution to buy shares of UniCredit, according to two people with knowledge of the plan.

The Italian government’s financial security committee approved allowing the Central Bank of Libya to participate in UniCredit’s rights offering to maintain its 5 percent stake in the lender, according to the people, who asked to not be identified because the decision isn’t public.

Assets owned by Libya’s central bank and sovereign wealth fund were frozen by the European Union, U.K. and U.S. as part of their effort to cut off deceased Libyan leader Muammar Qaddafi’s access to funding during the nation’s civil war. The 2.6 percent stake in UniCredit held by the Libya Investment Authority, a fund linked to Qaddafi’s family, will stay frozen.

--With assistance from Elisa Martinuzzi in Milan. Editors: Dylan Griffiths, Steve Bailey.

To contact the reporter on this story: Sonia Sirletti in Milan at ssirletti@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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